Forwarders, 3PLs expect growth in 2013

Thursday, November 15, 2012

Logistics service providers and freight forwarders are optimistic that the economy will continue to grow, and provide opportunities for expansion in 2013, according to a survey by the logistics researcher and analyst Transport Intelligence (Ti), and Kewill, a global trade and logistics software provider.
In the survey, 80 percent of respondents reported slight business expansion over the past two years, with more than 75 percent expecting this growth to continue in 2013. The survey canvassed opinions from 484 international businesses, and was developed to examine the lasting impact the global economic downturn has had on logistics service providers, and the role of information technology in ensuring their survival.
Growth has been well spread geographically across firms of differing sizes, although logistics service providers in Europe demonstrated lower growth rates in comparison to their counterparts in North Africa, the Middle East and Africa. Logistics companies in North America and Latin America, particularly freight forwarders and 4PLs, experienced the highest level of growth.
“This highlights the impact that the ongoing euro crisis has had on European logistics service providers,” the companies said.
The majority of logistics service providers will seek to generate their future expansion through organic growth, especially those with hefty loans and few tangible assets to invest in acquisitions, the survey found. However over 30 percent of forwarders and 3PLs envision growth by mergers or acquisitions in 2013, reflecting their sector’s stronger cash positions.
“With over two-thirds of companies surveyed expecting growth in the next 12 months and the majority of smaller firms feeling more optimistic, including 90 percent of 4PLs and over 80 percent of freight forwarders and 3PLs, the outlook for the logistics and transport industry is looking up,” said Joel Ray, head of consultancy at Transport Intelligence.
Gerry Daalhuisen, solution manager for global trade and logistics at Kewill, said high-growth midsized organizations (with 251 to 500 employees) need investment to sustain their momentum.
“The companies who reinvested in their business and focused on expansion were the ones who reaped the rewards,” he said. “Investing in technology is no longer an option, it is imperative in doing business efficiently and thriving in today’s tough market place.” - Eric Johnson